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Author Topic: SCOTUS decision on state tax for online purchases  (Read 2501 times)

Rob C

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Re: SCOTUS decision on state tax for online purchases
« Reply #20 on: June 24, 2018, 10:11:42 AM »

The camera shop, staffed by people who knew their onions, was a very useful resource. But its demise started long before the Internet, with the huge marketing mistake that allowed big buyers to buy from manufacturers at lower prices than could little shops. What madness! The manufacturers would have sold the same number of items at the same price, whether from a mega-store or a local one-man operation. The only retail price advantage a mega should have had was from its own, internal economies of scale, not from unfair selling by the manufacturers.

I chose to buy all my camera stuff locally, despite the existence of several huge, postal dealerships in Leeds and London who could have saved me a few miserable quid. In the event of a failure, how nice to go back to the local shop and hand over the product, the solution then up to the shopkeeper and the reps. Imagine: no repacking, insuring, visits to the post office!

As with so much that ails society, it's rooted in pure, bloody greed. We bring these things upon ourselves.

Alan Klein

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Re: SCOTUS decision on state tax for online purchases
« Reply #21 on: June 24, 2018, 11:13:20 AM »

I'm sure you're right, Alan. Amazon has been collecting sales tax for a long time now. I suspect B&H and Adorama will simply lower their prices to fight any attempt to reinstate camera shops. A camera shop has expenses B&H simply doesn't have to deal with when they ship stuff directly to a customer. Too bad, though. The local camera shop was a great place for people testing photography with a toe to find out what's involved. It's not all selfies with a cell phone out there nowadays, though it sometimes feels that way.
Just to clarify, B and H has a huge store in NYC on 34th Street near Madison Square Garden.  I've been there many times.  They aren't just an internet store.  They have hundreds of salespeople and 250,000 items you can fondle. They have free talks all of which are video'd so you can watch from where you live as well as stored on the internet.  They provide training and demonstrations constantly.  Also taped.  You can go in and try printing from different computer setups, buy or sell your used equipment, etc.   You can buy fresh film, developers, stands, lighting, telescopes, etc.  They have kiosks of equipment from each of the major camera manufacturers manned with knowledgeable people  to help you decide and try the stuff.   They have a visible overhead conveyor belt system so you can watch the stuff you buy get transported from the sales floor to the checkout area where a dozen people are busy packing your stuff ready to leave with you when you pay.  It's like a candy store for little kids.  You can get lost in there for a week.  They own a parking lot across the street for those who drive, near subways and the bus terminal for those who don't.  All of these things are enormously expensive, especially in NYC with taxes, labor costs, etc.  Of course they have a big market locally. 

But the point is that they are in the big business of a local store as well as big internet sales.  It is unfortunate that so many other markets can't have the walk-in ability with all the top rate technical support New York City area photographers have with B and H.

Slobodan Blagojevic

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Re: SCOTUS decision on state tax for online purchases
« Reply #22 on: June 24, 2018, 11:33:51 AM »

Excellent post, Alan!

And yes, I've been there several times too. It is like you die and end up in a photographic heaven. Well, for the gear junkies, anyway ;) Then again, even if you are an artist-photographer only, you do need to take care of equipment inevitably.

Alan Klein

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Re: SCOTUS decision on state tax for online purchases
« Reply #23 on: June 24, 2018, 11:38:24 AM »

Equal tax requirements create playing fields and are good, long term and overall.  It creates fairer competition that will lower prices for consumers and foster more innovation, always a good thing.  Displacements occur continuously in a vibrant and fair market, which is what we want. How many people would prefer doing away with the internet and going back to stores only?
« Last Edit: June 24, 2018, 11:42:25 AM by Alan Klein »
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Martin Kristiansen

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Re: SCOTUS decision on state tax for online purchases
« Reply #24 on: June 24, 2018, 11:40:55 AM »

I visited B&H before the internet was a thing. They were  legendary even then. About three months ago I decided to buy a Sony 70 to 200. Well actually it became a pressing business requirement. No Sony dealer where I live. Wednesday lunchtime I downloaded B&H’s app onto my iPhone and placed the order. Friday afternoon the lens was delivered to my door. In Johannesburg. Weird thing is I wasn’t even surprised. That’s the service I have come to expect from them. Amazing.
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Chris Kern

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Re: SCOTUS decision on state tax for online purchases
« Reply #25 on: June 24, 2018, 11:57:57 AM »

Just to clarify, B and H has a huge store in NYC on 34th Street near Madison Square Garden.  I've been there many times. . . .  [T]hey are in the big business of a local store as well as big internet sales.  It is unfortunate that so many other markets can't have the walk-in ability with all the top rate technical support New York City area photographers have with B and H.

They also provide exceptional customer service to Internet customers.  Not happy with that sample of a lens they sent you?  Send it back at their expense.  Got a presales question?  Phone them or open an online chat session; in my experience, their rep will give you remarkably objective advice, not just a sales pitch.  If they eventually are required to collect sales tax from all U.S. purchasers—note that the individual states will each need to enact new laws before this happens except in the unlikely scenario that they follow Amazon's lead and choose to collect state taxes at their own initiative—I doubt their Internet sales will be adversely affected.  And, of course, the Supreme Court ruling is irrelevant to international sales, which I suspect are a growing component of B&H's business.

In the long term the Court's decision probably will help local stores in the United States compete more effectively with the big Internet sales outlets.  But I suspect the effect will vary considerably by locality and store type.  Frankly, I'd be surprised if it does much to revive the local retail camera trade.

Alan Klein

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Re: SCOTUS decision on state tax for online purchases
« Reply #26 on: June 24, 2018, 12:33:48 PM »

I was just looking at South Dekota ruling that SCOTUS based it on.  SD implementation starts at $100,000 or 200 sales which is a lot of money and activity for an out-of-state small business to sell there by the internet.  Less than that, they don't have to worry about it.   If they're doing that much business, they will be able to afford the additional paperwork which hopefully will be reduced even more with a central clearinghouse. 

Alan Klein

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Re: SCOTUS decision on state tax for online purchases
« Reply #27 on: June 24, 2018, 12:47:30 PM »

I think I'm reversing myself.  Maybe Congress shouldn't get involved.  Let private enterprise develop clearinghouses that business can pay to handle their sales tax payments easily, if they wish.  Congress will only mess things up.   

When I was in business, I used a payroll service to handle paying my employees and the feds, states and local taxes including social security withholding income etc.  I could see ADP and other payroll services like them getting involved and providing paying sales taxes as an additional service to their clients.  Or a separate.  Any bright, entrepreneurial IT people out there?  Here's your chance to start a business.

Chris Kern

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Re: SCOTUS decision on state tax for online purchases
« Reply #28 on: June 24, 2018, 01:57:53 PM »

Let private enterprise develop clearinghouses that business can pay to handle their sales tax payments easily, if they wish.

I don't have any inside information, but I suspect Amazon—which already collects sales taxes on behalf of states where it does not have a physical presence for products sold and fulfilled by Amazon (but not those sold through Amazon by other sellers)—already is prepared to offer just such a service.

Of course, Congress has the inherent authority "[to] regulate Commerce . . . among the several States."  That's the whole point of the "commerce clause" in Article I, Section 8, of the U.S. Constitution.  But there are significant economic interests on both sides of this issue which may influence the congressional delegations of different states in conflicting ways, and so far Congress has declined to enact a national statutory regime for the collection of state sales taxes.  So for now, at least, each state legislature is free to draft a law to require out-of-state retailers to collect taxes on purchases by its residents.

texshooter

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Re: SCOTUS decision on state tax for online purchases
« Reply #29 on: June 24, 2018, 02:28:00 PM »

Now that the state will be collecting more tax revenue thanks to the SCOTUS ruling, the government can now lower the sales tax rate for everybody. No?

« Last Edit: June 24, 2018, 03:23:17 PM by texshooter »
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D Fuller

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Re: SCOTUS decision on state tax for online purchases
« Reply #30 on: June 24, 2018, 04:37:00 PM »

I think I'm reversing myself.  Maybe Congress shouldn't get involved.  Let private enterprise develop clearinghouses that business can pay to handle their sales tax payments easily, if they wish.  Congress will only mess things up.   

When I was in business, I used a payroll service to handle paying my employees and the feds, states and local taxes including social security withholding income etc.  I could see ADP and other payroll services like them getting involved and providing paying sales taxes as an additional service to their clients.  Or a separate.  Any bright, entrepreneurial IT people out there?  Here's your chance to start a business.

I don’t know about other states, but I pa6 sales tax in Maine, where my business is located. It takes me about 5 minutes every quarter. Quickbooks makes it exceedingly simple to do. If I were required to pay sales tax in other states, I don’t see that a platoon of accountants would be required.
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digitaldog

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Re: SCOTUS decision on state tax for online purchases
« Reply #31 on: June 24, 2018, 04:39:44 PM »

I don’t know about other states, but I pa6 sales tax in Maine, where my business is located. It takes me about 5 minutes every quarter. Quickbooks makes it exceedingly simple to do. If I were required to pay sales tax in other states, I don’t see that a platoon of accountants would be required.
+1, takes mere minutes for me, twice a year, in New Mexico.
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Andrew Rodney
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Alan Goldhammer

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Re: SCOTUS decision on state tax for online purchases
« Reply #32 on: June 24, 2018, 04:53:52 PM »

Well you did underline "legal".  Use taxes are rarely collected.  Who reports they bought something from out of state and then reports and pays the sales tax to their state? 
I have done Pennsylvania state income taxes for several years when my daughter was living there and IIRC they have some type of calculation for this that is automatically triggered.  It's been a couple of years so if anyone from PA is looking at this they can weigh in.
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Slobodan Blagojevic

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Re: SCOTUS decision on state tax for online purchases
« Reply #33 on: June 24, 2018, 05:04:45 PM »

I don’t know about other states, but I pa6 sales tax in Maine, where my business is located. It takes me about 5 minutes every quarter. Quickbooks makes it exceedingly simple to do. If I were required to pay sales tax in other states, I don’t see that a platoon of accountants would be required.

I did pay sales tax in Illinois for a couple of years. It took way longer than five minutes per quarter, mostly due to the confusing nature of online forms.

However, I have no idea what would take to report sales tax in all 50 states. I know that, when I report my income tax for just one state, I have to pay about $20 per state to submit it electronically (free if by mail). Also, one state is included in the federal price, but each extra state is about $20.

Alan Goldhammer

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Re: SCOTUS decision on state tax for online purchases
« Reply #34 on: June 24, 2018, 06:18:17 PM »

However, I have no idea what would take to report sales tax in all 50 states. I know that, when I report my income tax for just one state, I have to pay about $20 per state to submit it electronically (free if by mail). Also, one state is included in the federal price, but each extra state is about $20.
Don't know what software you use for taxes but those are about the right prices for Turbo Tax that I use.  The states also make things much more difficult than they should be.  My daughter works at on a summer camp staff in Pennsylvania and every year I have to file a paper return to get back the withheld state income tax as Maryland is a reciprocal state under the joint agreement between the states.  A few years ago you could do this all on line and get the refund back in a couple of weeks.  Now you send the return in and it's usually 8-10 weeks before she gets her return.

It's even more ludicrous with trust income.  I was the trustee for an inherited trust for the two daughters and I had to file a Federal and multiple State tax returns (one for Maryland where I live and the other for where the daughter lived).  It was worse the first couple of years as there was an apartment building in California that paid out rental income.  Each of the girls had to file separate returns for $2 of taxes, yes TWO DOLLARS.  What was worse since both girls lived out of state the returns could not be done electronically as it was real estate income.  IIRC each return ran about 40 pages so there was extra postage involved and yearly accountant's fees.  Fortunately, the apartment building was sold as soon as the real estate market rebounded and the trust dissolved when the girls turned 30.  Unless there is a real good reason, I wouldn't subject my kids to dealing with an inherited trust.
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Alan Klein

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Re: SCOTUS decision on state tax for online purchases
« Reply #35 on: June 24, 2018, 07:07:43 PM »

+1, takes mere minutes for me, twice a year, in New Mexico.
But if another state, let's say 25 states, where you sent your products out requires paperwork too, the time you'd have to work at it will go up considerably.  Then what happens when you get a letter from Hawaii, that asks for back up information on the shipments you made to there.  Multiply that by 25 states.  It can get really crazy.  I think the $100,000 start amount in SD is what will keep this from getting out of hand.  Most small businesses don;t do that much, at least not in a foreign state.  If they do, God bless them and they'll be able to afford a bookkeeper.

digitaldog

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Re: SCOTUS decision on state tax for online purchases
« Reply #36 on: June 24, 2018, 07:16:15 PM »

But if another state, let's say 25 states, where you sent your products out requires paperwork too, the time you'd have to work at it will go up considerably. 
Nope, I only have to report sales tax in the state I reside in, do business in, no matter where my customers come from. That was the same when I did business in California! I can't speak for all other states, can you (or speak of those 25)?
Do you actually have your own business, file sales tax? What state?
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Andrew Rodney
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Alan Klein

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Re: SCOTUS decision on state tax for online purchases
« Reply #37 on: June 24, 2018, 09:38:24 PM »

Nope, I only have to report sales tax in the state I reside in, do business in, no matter where my customers come from. That was the same when I did business in California! I can't speak for all other states, can you (or speak of those 25)?
Do you actually have your own business, file sales tax? What state?
I'm retired now.  But I had a specialty contracting firm that mainly installed and serviced BAS and EMS systems in NY.  Our offices were in NYC and all our employees worked out of NY.  However, we had customers in NJ.  So when we did work there, we billed them including NJ sales tax which I reimbursed to NJ having to file NJ State Sales Tax forms.  If I recall correctly, it was on a quarterly basis, but it could be monthly if the sales tax was over a certain limit.  I had both NJ and NJ Certificates of Sales Tax that allowed me to collect sales tax in both states even though my company had no physical presence in NJ.  It would not have been legal to do my work in NJ without it. 

So now with internet sales, companies like yourself will have to pay sales tax to many states.  How will that be set up?  Will the company have to get a sales tax certificate for each state they do business in?  Will they have to file forms and pay on a monthly or quarterly basis?  Your current situation may change.  Maybe a lot depending on the amount of sales in each individual state.  I was once audited by NJ Sales Tax people.  It was expensive, not what they found, but just the cost of my accountants who were required for the audit.  So paying sales tax in all these states can open companies up to all kinds of headaches.

I think that clearinghouses will be set up by some entrepreneurial people, maybe yourself.  They will set up so they will pay each of the states for many companies, just like payroll firms like ADP now handle payroll processing including withholding taxes for company's employees.  They pay the state and federal withholding taxes.  Maybe ADP will add sales tax payments to their services.  Then you would send in one check, with one sheet that shows all the sales for all of the states you did business in.  ADP will handle the distribution of those funds to each state for you and charge you a small handling fee.

Alan Klein

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Re: SCOTUS decision on state tax for online purchases
« Reply #38 on: June 24, 2018, 09:41:02 PM »

Another interesting point.  IF you're a company that have customers buy things in your store and then have them shipped to their home in another state, will you have to start collecting sales tax for that state too just like internet sales?  That hasn't been the case. 

Alan Klein

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Re: SCOTUS decision on state tax for online purchases
« Reply #39 on: June 24, 2018, 09:45:52 PM »

One benefit I haven't heard anyone speak of yet, is that internet taxes benefits small companies in another way.  If a retail store or even someone who does business out of their house does less the required limit (ie. South Dakota SCOTUS case indicated $100,000 or 200 sales), then you don't have to charge sales tax.  So that will put you in a stronger position than larger companies who going over the state limit as they will have to collect the sales tax from the buyer.  That will raise their prices and make the smaller companies more competitive. 
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